The luxury real estate market is wrapping up 2024 on a high note, with November data highlighting resilience after mid-year fluctuations.
October’s inventory growth and September’s interest rate cuts spurred notable sales increases. While November saw the usual seasonal slowdown, year-over-year metrics increased significantly, especially for sales.
Mansion Global reported a surge in November luxury home deals in affluent areas like Manhattan, Miami, and Palm Beach, with properties above $5 million performing especially well.
Market Highlights
- Sales Growth: Single-family home sales rose 22.5% year-over-year in November, while attached homes grew by 7.7%.
- Inventory: New listings entering the marketing increased by 8.3% for single-family homes and 7.0% for attached properties, signaling renewed seller confidence.
- Prices: Median sold prices for single-family homes climbed 3.6% year-over-year. Although attached properties saw a slight 1.5% decline, the overall market remains optimistic heading into 2025.
Falling Interest Rates
Interest rates are trending downward. The Federal Reserve is expected to cut rates further in December to 4.25%, with the potential of reaching 3.5% by late 2025.
Similarly, Canada’s central bank is expected to reduce their interest rate in December by 25 to 50 basis points and aims for a 2.25% rate by next year’s end in 2025.
Lower mortgage costs are anticipated, but the pace of recovery will depend on inflation and labor market trends.
Consumer Sentiment stays Focused
Affluent buyers remain active, prioritizing sustainability, wellness amenities, and turnkey readiness in luxury properties.
Many view these homes as stable, long-term investments and are seeking properties that will meet both current and future needs as well as serve as a hedge against inflation and economic or stock market volatility.
While inventory constraints persist despite the uptick both overall and for new listings entering the market, buyers are patient, seeking properties that align with their specific needs.
Buy Now or Wait?
For mortgage-dependent buyers, buying now may avoid spring market competition, with the option to refinance later.
Cash buyers might find increasing inventory creates more opportunities, though significant price drops are unlikely.
Looking Ahead to 2025
Navigating this market requires strategic planning and expert guidance. Partnering with a luxury property specialist can help buyers and sellers achieve their goals as the market shows promise for continued resilience in the year ahead.
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